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An Ambitious Lexus Takes on the Europeans

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Old Apr 15, 2006 | 07:25 AM
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Default An Ambitious Lexus Takes on the Europeans

April 15, 2006
An Ambitious Lexus Takes on the Europeans
By MICHELINE MAYNARD




The Lexus brand has outsold Mercedes and BMW in the United States for the last five years, but it has long lacked the flagship sedan that could rival them in price, performance and prestige.

Until now.

With the Lexus LS 600hL, unveiled at the New York auto show this week, the company has rolled out by far its most ambitious car in a continuing battle with those venerable German rivals. Or as Bob Carter, general manager of Lexus, put it, the new model will take Toyota's luxury brand where it "has never before been."

The 600hL comes with a long list of safety and comfort features, as would be expected of a car that will go head-to-head against the most expensive BMW and Mercedes-Benz sedans.

But it will also be a hybrid, with a V-8 gasoline engine and an electric motor. Lexus says the new sedan will have the power of a V-12 with the fuel consumption of a V-8. The 600hL will be, in other words, ultraluxury with at least a dash of environmental conscience.

And because it is a hybrid, Lexus will have something for upscale buyers (Hollywood agents and the like are probably the target audience) that neither BMW nor Mercedes, which is owned by DaimlerChrysler, are planning to offer until later this decade. The German automakers are collaborating with General Motors on next-generation hybrid technology that the three will share and apply to whichever vehicles they deem appropriate.

Until then, the German automakers hope that most luxury buyers will not fall for the Lexus pitch. "We should not try to educate or teach the customer about what he or she wants," Helmut Panke, the chief executive at BMW, said in an interview this week.

But the Germans are certainly not standing still. At the New York show, lightning bolts crackled as Mercedes introduced the newest version of its midsize E-class sedan. BMW, meanwhile, is giving American customers the first look at its high-powered Z4 coupe, part of a lineup of new models on which it will spend 19 billion euros over the next few years.

Lexus's roots go back just 17 years to its beginnings as a bargain alternative to top-of-the-line European cars. But its biggest success by far has been in its sport utility vehicle lineup.

Despite a variety of luxury models, Lexus had stayed away from the highest end of the market, which the Germans long dominated. And it has never entirely shaken its image as a maker of cars that are highly polished and well engineered, but slightly bland. While Lexus did not give out a price for its new superluxury car, which goes on sale next April, industry analysts say they believe it will sell for at least $100,000, the same range as the Mercedes S-class and the BMW 750i.

To vault itself onto that ledge, Lexus has loaded all kinds of goodies onto the 600hL, starting with its 430-horsepower V-8 engine. All around the car are safety features meant to keep the car from hitting things and people, like the two cameras mounted on the front that spot objects as small as toddlers and warn the driver to stop.

Inside the passenger compartment, a camera is trained on the driver that sets off an alarm if his attention wanders. Mounted on the back is a system to parallel park the Lexus automatically.

Lexus contends that it is twice as quiet as any car on the road, maybe the quietest ever — just the thing to set off a 19-speaker stereo system and traffic congestion monitor.

Some of the features may someday show up in less expensive cars but for now, they cost — a lot.

"What's so important in this segment is craftsmanship," Mr. Carter said. "You expect workmanship in a vehicle of this class."

Such high-priced cars are often where the industry's most advanced technology first appears, but it can also be a turn-off to buyers if any problems occur. Mercedes has attributed its recent quality struggles to cutting-edge electronics and other features that still had some bugs to work out.

In the past, buyers might have forgiven luxury makers for the kinks as long as the ride and handling of their cars met their expectations. Not any more, and that is one reason BMW has not rushed to match Lexus in the hybrid vehicle race.

The 600hL will be Lexus's third hybrid vehicle, in addition to the RX 400h sport utility and the GS 450h, a sporty sedan. By contrast, BMW's first hybrid will not reach the market until 2008 at the earliest.

Mr. Panke said BMW decided to wait until it could develop a hybrid vehicle that was every bit as refined and powerful as its conventional cars.

A crucial question carmakers face is whether high-powered hybrids will offset the mixed performance that plagues their mass-market counterparts. This month, Ford began offering no-interest financing for 60 months on its hybrid Escape.

Ford's North American marketing chief, Cisco Codina, maintained this week that the no-interest plan had already spurred hybrid business. He said the incentive plan did not signify that hybrids were losing steam.

"There are always early adapters" who buy the first version of any vehicle, Mr. Codina said. Now, Ford is aiming at buyers who are asking, What's that going to bring for me?

Sales of the Honda Accord hybrid have also been slow. **** Colliver, a Honda executive vice president, said at the auto show that the company might therefore cut production. He said a decision would be made later this year.

Ford, meanwhile, may soon bring its buyers a luxury hybrid. It plans to build a hybrid version of the coming Mark X crossover vehicle, which would compete directly with the Lexus RX 400h, on the market since last year. Mr. Panke at BMW, for his part, shows no anxiety about matching Lexus. He acknowledges that BMW's customers have asked when the company will have a high-powered hybrid but he contends that BMW's solution will feel like a BMW, not a car dreamed up in a research lab.

"The key question is, Will it have the performance?" Mr. Panke said. "The BMW customer will not sacrifice on performance."

Copyright 2006 The New York Times Company
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Old Apr 15, 2006 | 09:31 AM
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interesting read... what is most exciting is the LS600hL though, that's gonna be one heck of a car! the length might even come close to how long the names are starting to get.
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Old Apr 15, 2006 | 10:05 AM
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Indeed, interesting read. Look at Cadillac though. Good for them for turning it around in 2000

They talk about BMW in the article, where is it on the chart?
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Old Apr 15, 2006 | 10:08 AM
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They didn't include BMW on the chart, there are only 4 lines, for Lexus, MB, Cadillac & Lincoln . . .
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Old Apr 15, 2006 | 10:15 AM
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Originally Posted by LexArazzo
They didn't include BMW on the chart, there are only 4 lines, for Lexus, MB, Cadillac & Lincoln . . .
No, I know... I'm just wondering with BMW pretty much being Lexus's biggest competitor and probably pretty close to the world's best selling brand, why wouldn't they include that?
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